On Monday, H.C. Wainwright maintained a Buy rating on shares of Assertio Therapeutics (NASDAQ:ASRT) with a steady $4.00 price target. Assertio Holdings recently announced its third-quarter financial results for 2024, posting revenues of $29.2 million, which align closely with the analyst's prediction.
The company's revenue for the full year of 2024 is now expected to be slightly lower at $122.7 million, compared to the initial forecast of $123.7 million. The adjustment is attributed to the potential impact of increased competition on the company's former top product, Indocin.
Despite challenges, Assertio has successfully defended its market share for Indocin. The analyst suggests that the presence of only one generic competitor for the remainder of the year may alleviate some pricing pressures, allowing Assertio to sustain its share in the market. Indocin has historically provided high gross margins, above 90%, which has been beneficial for the company.
Assertio's overall gross margins have seen an improvement, reaching 74% in the third quarter, up from 71% in the second quarter of 2024. This increase is due to reduced inventory write-downs and the completion of Rolvedon inventory step-up amortization. Rolvedon, a newer revenue contributor for Assertio, is expected to have gross margins in the 60% range, which may lead to a long-term decline in overall gross margins.
The company also reported a net loss of $0.03 per share for the third quarter, which was better than the analyst's expectation of a $0.05 per share loss. For the full year of 2024, the projected net loss has been improved to $0.15 per share from an earlier estimate of $0.19 per share. The forecast for 2025 remains unchanged with an anticipated net loss of $0.03 per share.
In conclusion, H.C. Wainwright reaffirms its confidence in Assertio Therapeutics by reiterating a Buy rating and maintaining the 12-month price target of $4.00. The company's ability to manage market share amid generic competition and improve its gross margins contributes to this positive outlook.
In other recent news, Assertio Holdings unveiled its third-quarter results, with total product sales landing at $28.7 million, a slight decrease from the previous quarter. This dip in sales is largely attributed to a drop in INDOCIN sales.
However, ROLVEDON, Assertio's lead product, maintained a steady sales figure of $15 million. In terms of finances, the company reported a GAAP net loss of $2.9 million, but achieved an adjusted EBITDA of $5.3 million.
Assertio's leadership underwent changes, with Peter Staple stepping down and Heather Mason stepping in as the new Chairwoman of the Board. The company's future plans involve expanding the market presence of ROLVEDON and capitalizing on the under-tapped Sympazan market.
Despite the challenges faced, such as a decline in INDOCIN sales and a net quarterly loss, Assertio Holdings remains committed to its growth strategy, focusing on strategic product positioning and market expansion.
InvestingPro Insights
To complement the analysis provided by H.C. Wainwright, recent data from InvestingPro offers additional context on Assertio Therapeutics' financial position. The company's market capitalization stands at $89.83 million, reflecting its current market valuation. Despite the challenges mentioned in the article, InvestingPro Tips highlight that Assertio holds more cash than debt on its balance sheet, which could provide financial flexibility as it navigates competitive pressures.
The company's revenue for the last twelve months as of Q3 2024 was $125.76 million, with a notable revenue decline of 25.77% over this period. This aligns with the article's mention of reduced revenue expectations due to increased competition for Indocin. However, an InvestingPro Tip suggests that Assertio is trading at a low revenue valuation multiple, which could indicate potential undervaluation.
While the article notes a net loss in the recent quarter, an InvestingPro Tip reveals that analysts predict the company will be profitable this year. This projection could support H.C. Wainwright's maintained Buy rating and $4.00 price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Assertio Therapeutics, providing a deeper understanding of the company's financial health and market position.
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